Ibec: Businesses need €15bn rescue package to survive Covid-19 fallout
The next government must set aside another €15bn of exchequer funds to help the country’s businesses recover from the Covid-19 crisis and adapt to the new reality of living once it passes, according to Ibec.
That money – which is in addition to the billions of euro worth of supports already committed - needs to be invested this year and next, it said.
In a wide-reaching blueprint for Ireland’s recovery and rejuvenation, the business representative group has put the direct cost of the crisis to the exchequer at €15bn. However, it has also called for a large injection of non-exchequer funding.
It said the current budget of the National Development Plan (NDP) – which sits at €116bn – should be increased by €25bn over the next seven years. That money, Ibec said, should come from a variety of largely non-exchequer sources such as European Investment Bank loans, European Commission money and increased use of public-private partnerships – or PPPs.
Ibec wants the next government to put in place a “reboot plan” within its first 100 days in office, with the €15bn stimulus package invested over the course of the remainder of this year and 2021.
“Government must do whatever it takes to restore the economy and should endeavour to offset the collapse in GDP with increased public spending, tax supports and investment,” Ibec said.
The scale of the package is both affordable and necessary and would be in line with international expert opinion and best practice.
The €15bn should go on a variety of things, Ibec said. These include an extension to the wage subsidy scheme, debt cover, tax measures to support business investment, a re-start grant for SMEs, re-employment and retraining projects, urban and rural regeneration spending, an export credit insurance scheme and the reduction to 9% and expansion of the hospitality sector Vat rate.
Ibec has also called for a new Commission on Taxation to be in place by the end of this year and wants much stronger private sector engagement with government over the management of future crises. A new social insurance system is also needed, it said.
The business group also said the NDP is too reliant on exchequer funding and a new PPP pipeline to cover transport, housing, education and health projects should be developed. Ibec also wants a 50% reduction in delivery time of projects of national importance.
It said the NDP should also be used to better adapt Ireland to new living realities – covering tax reliefs and supports for remote working staff; delivering greater funding for childcare and investing in the digital economy, for which it said there should be a dedicated minister for digital affairs.
